Laurie Don

Alzheimer's: new research provides big opportunities

Laurie Don

This article was first published by Alliance Trust Investments on 06 October 2016.

Laurie Don, Investment Manager at ATI, discusses the potential investment opportunities in companies trialling new treatments for Alzheimer’s disease.

At ATI we seek out adaptors and innovators as we believe companies that are providing solutions to societal and environmental challenges will be the ones to thrive over the long term. One area currently crying out for innovation is in the treatment of Alzheimer’s disease. For many years, there has been little to no progress in the treatment of this disease with some reports indicating that 99.6% (1) of trials between 2002 and 2012 were unsuccessful. However, some research companies may now be on the cusp of achieving significant breakthroughs in the understanding and treatment of the disease and we believe there could be significant investment opportunities in this area.

The problem

Alzheimer’s disease is an irreversible, progressive brain disorder that slowly destroys memory and cognitive skills, and eventually the ability to carry out the simplest of tasks. Symptoms of Alzheimer’s typically start to appear in patients in their mid 60’s. Experts estimate that more than five million Americans may have Alzheimer’s (2) and over 500,000 Britons (3). It is estimated that in 2015 the cost of Alzheimer’s to the US economy was around $226 billion (4) while in the UK the cost was estimated at around £26 billion (5) in 2014. These figures underline just how important the prevention of Alzheimer’s is and why scientists are working hard to find a successful treatment.

Currently doctors are only capable of providing treatments that offer symptomatic relief. This is merely a temporary respite that delays cognitive deterioration by around six to 12 months. Ultimately though, it does not prevent the destruction of neurons and the inevitable deterioration of the brain.

However, through recent research, scientists are now starting to believe that Alzheimer’s may be present in the brain far earlier than it becomes symptomatically evident. As is the case with any disease, the ideal situation would be early prevention through a process of identification and elimination of the genetic, environmental, and lifestyle factors that contribute to the disease. Unfortunately, this is still a while away yet but for now, scientists are instead attempting to identify early signs that indicate the disease is likely to worsen and work on preventing (or eliminating) these potential causes of Alzheimer’s. This may present potential opportunities for investors in the near future.

Prevention over cure

There are currently three main ongoing trials aimed at developing a preventative treatment for Alzheimer’s disease these are being run by Eli Lilly and Company, Biogen and Instituto Grifols. Because of the significant and growing costs of this disease to society worldwide, we at ATI believe companies that develop preventative therapies to treat Alzheimer’s will provide good value for investors. The longer term development of this disease may allow research companies to gain a significant competitive advantage over time. Because of the long lead time for symptoms to appear the results of clinical studies will take some time. However if, and when, successful results are achieved, to companies already involved will see the rewards from this early investment. In the meantime we at ATI will continue to closely monitor the progress of those companies currently in the research and development stages, making investments where we see the best opportunities.








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Wednesday, October 5, 2016, 11:00 PM